The mortgage registration tax previously applied to mortgage documents filed on all types of real property. As a result, the phase-out of the mortgage registration tax over a five-year period beginning on January 1, 2015 will apply equally to all real estate transactions, including agricultural, commercial, residential and industrial transactions.
See the summary below;
Summary of Substitute SB 298
– Repealing the Mortgage Registration Tax
Phases Out the Burdensome and Unfair Mortgage Registration Tax Over Five Years
(1) Beginning on January 1, 2015, the mortgage registration tax will be phased out over a period of five years. This will ensure that each county continues to collect the full 0.26% amount of mortgage tax revenue ($260 per $100,000 borrowed) through the end of 2014. In future years, the phase-out would:
- After January 1, 2015, the tax rate will drop to 0.20%;
- After January 1, 2016, the tax rate will drop to 0.15%;
- After January 1, 2017, the tax rate will drop to 0.10%;
- After January 1, 2018, the tax rate will drop to 0.05%; and
- After January 1, 2019, the tax rate drops to zero and the tax is repealed.
Increases Document Recording Fees Already Found in Current Law to Help Mitigate Revenue Loss for Counties
(2) Increases the per page document recording fees already found in current law by $12 per page over four years beginning on January 1, 2015. This will provide revenue for counties to offset the loss of the revenue from the mortgage registration tax and a dedicated revenue source of $0.50 for County Clerks and $0.50 for County Treasurers to upgrade equipment associated with filing mortgages and other documents.
Caps Document Recording Fees at $125 for All Residential Mortgages Valued at Less than $75,000
(3) In order to ensure that low-income borrowers are not burdened by the increased document recording fees, the amendment establishes a $125 cap on the total document recording fees that would be paid by a homeowner for all mortgage loans of less than $75,000 in value. If a home owner files a mortgage that is valued at less than $75,000, they will never pay more than $125 to file their mortgage documents.
Protects and Fully Funds Historic Preservation through the Heritage Trust Fund
(4) Finally, Substitute SB 298 protects and fully funds the Heritage Trust Fund with a $1 per page surcharge on all recorded documents, which will actually result in a slight increase in funding. On January 1, 2015, the 0.01% portion of the mortgage registration tax that funded the Heritage Trust Fund will be eliminated. In every calendar year, the amount of money that goes into the fund from each county is capped at $30,000, which will provide more revenue to counties to mitigate the loss of revenue.
Summary Provided by the Kansas Bankers Association. Contact (785)232-3444.
